Memorandum submitted by Rio Tinto Plc
Rio Tinto plc has been invited to submit evidence
to the Committee "setting out as far as is possible the company's
previous interests and activities in, and the reasons for its
withdrawal from, the region".
Rio Tinto plc is pleased to be able to assist
the Committee and submits the following evidence.
In the early 1990s, Rio Tinto established an
office in Moscow and set about identifying and evaluating the
most attractive business development opportunities in the Former
A large number of prospects were considered
in Russia itself but few were of interest and those that were,
were not offered on satisfactory legal and other terms. The company
also considered two significant businss opportunities in Central
(1) Exploration around and/or expansion
of the Murantau gold mine in Uzbekistan.
(2) Development of the Vasilkovskoye
gold deposit Kazakhstan.
In 1996, Rio Tinto entered into a three-year
technical collaborative agreement with Uzbekhistan's State Committee
of Geology and Mineral Reserves. The purpose of the agreement
was to assemble and analyse geological data about the area around
the Muruntau gold mine. Rio Tinto also established a representative
office in Tashkent to support this project.
Progress under this agreement was slow, mainly
because much of the required data was classified and could not
be released. However, information began flowing more freely in
1998. Once data had been assembled and target areas visited it
became clear that there had been saturation exploration around
the deposit which precluded the possibility of the discovery of
another Muruntau size deposit at shallow depths.
Discussions with the Government of Uzbekistan
about a joint venture to expand Muruntau also failed.
In 1998, Rio Tinto closed its representative
office in Tashkent. The collaborative agreement expires shortly
and will not be renewed.
Rio Tinto first entered into discussions with
the government of Kazakhstan about the development of the Vasilkovskoye
gold deposit in late 1992.
In March 1995, the Government of Kazakhstan
put Vasilkovskoye out to international tender. The tender was
being organised by the Government's advisors, Morgan Grenfell,
and funded by the European Bank for Reconstruction and Development.
In April 1995, it was announced that the Government
of Kazakhstan had reached agreement with a Canadian mining company
to develop Vasilkovskoye. This agreement was reached outside the
tender process. Ultimately, the Canadian company was forced to
relinquish its interest Vasilkovskoye.
In 1996, the Government of Kazakhstan sought
to put Vasilkovskoye out to tender again. Rio Tinto did not participate
in this tender.
The Vasilkovskoye deposit remains undeveloped.
Rio Tinto can only carry out exploration in
countries which offer both the potential for world-class mineral
resources and an acceptable investment climate. Neither Kazakhstan
nor Uzbekistan offered the latter.